President Bola Tinubu has approved the cancellation of a substantial portion of the debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account, wiping off about $1.42 billion and N5.57 trillion following a reconciliation of records between both parties.
Details of the presidential approval were contained in a document prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November meeting of the Federation Account Allocation Committee (FAAC).
In a section titled “Recovery from NNPC Ltd Outstanding Obligations,” the commission recalled that the debts earlier reported at the October 2025 FAAC meeting stood at $1,480,610,652.58 and N6,332,884,316,237.13.
The amounts related to Production Sharing Contracts (PSC), Direct Sale Direct Purchase (DSDP), Royalty and Miscellaneous Crude Allocation (MCA) liftings, as well as Joint Venture and PSC royalty receivables.
However, the NUPRC confirmed that it had received presidential approval to “nil off” the outstanding obligations of NNPC Ltd as at 31 December 2024, based on recommendations from the Stakeholder Alignment Committee on the reconciliation of indebtedness between the company and the Federation.
Providing a breakdown, the commission said $1,421,727,723.00 and N5,573,895,769,388.45 of the earlier-reported balances had now been cleared.
“The commission has passed the appropriate accounting entries as approved,” the document stated.
NNPC Ltd was commercialised under the Petroleum Industry Act, and the reconciliation is seen as part of ongoing financial restructuring between the company and the Federation.
